ED is perfectly inelastic as quantity demanded does not change at all in response to a change in price. Thus, its demand curve will be vertical/parallel to the y-axis. A consumer spends Rs. 1000 on a good priced at Rs. 10 per unit. When its price falls by 20 percent, the consumer spends Rs. 800 on the good. Calculate the price elasticity of demand by the Percentage method.
Added by Ismael W.
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Draw a graph of the demand for the good, using price (x-axis) and quantity demanded (y-axis). Show more…
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